[Federal Register Volume 64, Number 16 (Tuesday, January 26, 1999)]
[Notices]
[Pages 3928-3930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-1777]



[[Page 3928]]

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DEPARTMENT OF COMMERCE

International Trade Administration
[A-580-834]


Notice of Amended Preliminary Determination of Sales at Less Than 
Fair Value: Stainless Steel Sheet and Strip in Coils From Korea

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Amended preliminary determination of antidumping duty 
investigation.

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SUMMARY: On January 4, 1999, the Department of Commerce (``the 
Department'') published the preliminary determination of its 
antidumping duty investigation of stainless steel sheet and strip in 
coils (``SSSS'') from Korea. This investigation covers three 
respondents, Pohang Iron and Steel Co., Ltd. (``POSCO''), Taihan 
Electric Wire Co., Ltd. (``Taihan''), and Inchon Iron and Steel Co., 
Ltd. (``Inchon'').
    POSCO submitted a ministerial error allegation on December 28, 1998 
with respect to the preliminary determination signed on December 17, 
1998. Based on the correction of certain significant ministerial errors 
made in the preliminary determination, we are amending our preliminary 
determination. This amendment is in accordance with 19 CFR 351.224(e).

EFFECTIVE DATE: January 26, 1999.

FOR FURTHER INFORMATION CONTACT: Maria Dybczak or Rick Johnson, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 
20230; telephone: (202) 482-1398 (Dybczak) or (202) 482-3818 (Johnson).

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Act), are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to the Act 
by the Uruguay Round Agreements Act. In addition, unless otherwise 
indicated, all references to the Department's regulations are to the 
regulations set forth at 19 CFR part 351 (1998).

Significant Ministerial Errors

    Under 19 CFR 351.224, a significant ministerial error is defined as 
a correction which, by itself or in combination with other errors, (1) 
would result in a change of at least 5 absolute percentage points in, 
but not less than 25 percent of, the weighted average dumping margin 
calculated in the original (erroneous) preliminary determination; or 
(2) would result in a difference between a weighted-average dumping 
margin of zero or de minimis and a weighted-average dumping margin of 
greater than de minimis or vice versa. We are amending the preliminary 
determination of sales at less than fair value for SSSS from Korea to 
reflect the correction of a significant ministerial error made in the 
margin calculations regarding POSCO in that determination, pursuant to 
19 CFR 351.224(g)(1). We are publishing this amendment to the 
preliminary determination pursuant to 19 CFR 351.224(e).

Scope of the Investigation

    For purposes of this investigation, the products covered are 
certain stainless steel sheet and strip in coils. Stainless steel is an 
alloy steel containing, by weight, 1.2 percent or less of carbon and 
10.5 percent or more of chromium, with or without other elements. The 
subject sheet and strip is a flat-rolled product in coils that is 
greater than 9.5 mm in width and less than 4.75 mm in thickness, and 
that is annealed or otherwise heat treated and pickled or otherwise 
descaled. The subject sheet and strip may also be further processed 
(e.g., cold-rolled, polished, aluminized, coated, etc.) provided that 
it maintains the specific dimensions of sheet and strip following such 
processing.
    The merchandise subject to this investigation is classified in the 
Harmonized Tariff Schedule of the United States (``HTSUS'') at 
subheadings: 7219.13.00.30, 7219.13.00.50, 7219.13.00.70, 
7219.13.00.80, 7219.14.00.30, 7219.14.00.65, 7219.14.00.90, 
7219.32.00.05, 7219.32.00.20, 7219.32.00.25, 7219.32.00.35, 
7219.32.00.36, 7219.32.00.38, 7219.32.00.42, 7219.32.00.44, 
7219.33.00.05, 7219.33.00.20, 7219.33.00.25, 7219.33.00.35, 
7219.33.00.36, 7219.33.00.38, 7219.33.00.42, 7219.33.00.44, 
7219.34.00.05, 7219.34.00.20, 7219.34.00.25, 7219.34.00.30, 
7219.34.00.35, 7219.35.00.05, 7219.35.00.15, 7219.35.00.30, 
7219.35.00.35, 7219.90.00.10, 7219.90.00.20, 7219.90.00.25, 
7219.90.00.60, 7219.90.00.80, 7220.12.10.00, 7220.12.50.00, 
7220.20.10.10, 7220.20.10.15, 7220.20.10.60, 7220.20.10.80, 
7220.20.60.05, 7220.20.60.10, 7220.20.60.15, 7220.20.60.60, 
7220.20.60.80, 7220.20.70.05, 7220.20.70.10, 7220.20.70.15, 
7220.20.70.60, 7220.20.70.80, 7220.20.80.00, 7220.20.90.30, 
7220.20.90.60, 7220.90.00.10, 7220.90.00.15, 7220.90.00.60, and 
7220.90.00.80. Although the HTS subheadings are provided for 
convenience and Customs purposes, the Department's written description 
of the merchandise under investigation is dispositive.
    Excluded from the scope of this investigation are the following: 
(1) sheet and strip that is not annealed or otherwise heat treated and 
pickled or otherwise descaled; (2) sheet and strip that is cut to 
length; (3) plate (i.e., flat-rolled stainless steel products of a 
thickness of 4.75 mm or more); (4) flat wire (i.e., cold-rolled 
sections, with a prepared edge, rectangular in shape, of a width of not 
more than 9.5 mm); and (5) razor blade steel. Razor blade steel is a 
flat rolled product of stainless steel, not further worked than cold-
rolled (cold-reduced), in coils, of a width of not more than 23 mm and 
a thickness of 0.266 mm or less, containing, by weight, 12.5 to 14.5 
percent chromium, and certified at the time of entry to be used in the 
manufacture of razor blades. See Chapter 72 of the HTSUS, ``Additional 
U.S. Note'' 1(d).
    In response to comments by interested parties, the Department has 
determined that certain specialty stainless steel products are also 
excluded from the scope of this investigation. These excluded products 
are described below.
    Flapper valve steel is defined as stainless steel strip in coils 
containing, by weight, between 0.37 and 0.43 percent carbon, between 
1.15 and 1.35 percent molybdenum, and between 0.20 and 0.80 percent 
manganese. This steel also contains, by weight, phosphorus of 0.025 
percent or less, silicon of between 0.20 and 0.50 percent, and sulfur 
of 0.020 percent or less. The product is manufactured by means of 
vacuum arc remelting, with inclusion controls for sulphide of no more 
than 0.04 percent and for oxide of no more than 0.05 percent. Flapper 
valve steel has a tensile strength of between 210 and 300 ksi, yield 
strength of between 170 and 270 ksi, plus or minus 8 ksi, and a 
hardness (Hv) of between 460 and 590. Flapper valve steel is most 
commonly used to produce specialty flapper valves in compressors.
    Also excluded is a product referred to as suspension foil, a 
specialty steel product used in the manufacture of suspension 
assemblies for computer disk drives. Suspension foil is described as 
302/304 grade or 202 grade stainless steel of a thickness between 14 
and 127 microns, with a thickness tolerance of

[[Page 3929]]

plus-or-minus 2.01 microns, and surface glossiness of 200 to 700 
percent Gs. Suspension foil must be supplied in coil widths of not more 
than 407 mm, and with a mass of 225 kg or less. Roll marks may only be 
visible on one side, with no scratches of measurable depth. The 
material must exhibit residual stresses of 2 mm maximum deflection, and 
flatness of 1.6 mm over 685 mm length.
    Certain stainless steel foil for automotive catalytic converters is 
also excluded from the scope of this investigation. This stainless 
steel strip in coils is a specialty foil with a thickness of between 20 
and 110 microns used to produce a metallic substrate with a honeycomb 
structure for use in automotive catalytic converters. The steel 
contains, by weight, carbon of no more than 0.030 percent, silicon of 
no more than 1.0 percent, manganese of no more than 1.0 percent, 
chromium of between 19 and 22 percent, aluminum of no less than 5.0 
percent, phosphorus of no more than 0.045 percent, sulfur of no more 
than 0.03 percent, lanthanum of between 0.002 and 0.05 percent, and 
total rare earth elements of more than 0.06 percent, with the balance 
iron.
    Permanent magnet iron-chromium-cobalt alloy stainless strip is also 
excluded from the scope of this investigation. This ductile stainless 
steel strip contains, by weight, 26 to 30 percent chromium, and 7 to 10 
percent cobalt, with the remainder of iron, in widths 228.6 mm or less, 
and a thickness between 0.127 and 1.270 mm. It exhibits magnetic 
remanence between 9,000 and 12,000 gauss, and a coercivity of between 
50 and 300 oersteds. This product is most commonly used in electronic 
sensors and is currently available under proprietary trade names such 
as ``Arnokrome III.'' 1
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    \1\ ``Arnokrome III'' is a trademark of the Arnold Engineering 
Company.
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    Certain electrical resistance alloy steel is also excluded from the 
scope of this investigation. This product is defined as a non-magnetic 
stainless steel manufactured to American Society of Testing and 
Materials (``ASTM'') specification B344 and containing, by weight, 36 
percent nickel, 18 percent chromium, and 46 percent iron, and is most 
notable for its resistance to high temperature corrosion. It has a 
melting point of 1390 degrees Celsius and displays a creep rupture 
limit of 4 kilograms per square millimeter at 1000 degrees Celsius. 
This steel is most commonly used in the production of heating ribbons 
for circuit breakers and industrial furnaces, and in rheostats for 
railway locomotives. The product is currently available under 
proprietary trade names such as ``Gilphy 36.'' 2
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    \2\ ``Gilphy 36'' is a trademark of Imphy, S.A.
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    Certain martensitic precipitation-hardenable stainless steel is 
also excluded from the scope of this investigation. This high-strength, 
ductile stainless steel product is designated under the Unified 
Numbering System (``UNS'') as S45500-grade steel, and contains, by 
weight, 11 to 13 percent chromium, and 7 to 10 percent nickel. Carbon, 
manganese, silicon and molybdenum each comprise, by weight, 0.05 
percent or less, with phosphorus and sulfur each comprising, by weight, 
0.03 percent or less. This steel has copper, niobium, and titanium 
added to achieve aging, and will exhibit yield strengths as high as 
1700 Mpa and ultimate tensile strengths as high as 1750 Mpa after 
aging, with elongation percentages of 3 percent or less in 50 mm. It is 
generally provided in thicknesses between 0.635 and 0.787 mm, and in 
widths of 25.4 mm. This product is most commonly used in the 
manufacture of television tubes and is currently available under 
proprietary trade names such as ``Durphynox 17.'' 3
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    \3\ ``Durphynox 17'' is a trademark of Imphy, S.A.
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    Finally, three specialty stainless steels typically used in certain 
industrial blades and surgical and medical instruments are also 
excluded from the scope of this investigation. These include stainless 
steel strip in coils used in the production of textile cutting tools 
(e.g., carpet knives).4 This steel is similar to ASTM grade 
440F, but containing, by weight, 0.5 to 0.7 percent of molybdenum. The 
steel also contains, by weight, carbon of between 1.0 and 1.1 percent, 
sulfur of 0.020 percent or less, and includes between 0.20 and 0.30 
percent copper and between 0.20 and 0.50 percent cobalt. This steel is 
sold under proprietary names such as ``GIN4 Mo.'' The second excluded 
stainless steel strip in coils is similar to AISI 420-J2 and contains, 
by weight, carbon of between 0.62 and 0.70 percent, silicon of between 
0.20 and 0.50 percent, manganese of between 0.45 and 0.80 percent, 
phosphorus of no more than 0.025 percent and sulfur of no more than 
0.020 percent. This steel has a carbide density on average of 100 
carbide particles per square micron. An example of this product is 
``GIN5'' steel. The third specialty steel has a chemical composition 
similar to AISI 420 F, with carbon of between 0.37 and 0.43 percent, 
molybdenum of between 1.15 and 1.35 percent, but lower manganese of 
between 0.20 and 0.80 percent, phosphorus of no more than 0.025 
percent, silicon of between 0.20 and 0.50 percent, and sulfur of no 
more than 0.020 percent. This product is supplied with a hardness of 
more than Hv 500 guaranteed after customer processing, and is supplied 
as, for example, ``GIN6.'' 5
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    \4\ This list of uses is illustrative and provided for 
descriptive purposes only.
    \5\ ``GIN4 Mo'', ``GIN5'' and ``GIN6'' are the proprietary 
grades of Hitachi Metals America, Ltd.
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Period of Investigation

    The period of investigation (``POI'') is April 1, 1997 through 
March 31, 1998.

Background

    On December 17, 1998, the Department issued its notice of 
preliminary determination of the antidumping duty investigation of SSSS 
from Korea (Notice of Preliminary Determination of Sales at Less Than 
Fair Value: Stainless Steel Sheet and Strip in Coils from Korea (64 FR 
137 (January 4, 1999)). We preliminarily calculated a dumping margin of 
12.35 percent based on POSCO's sales.
    On December 28, 1998, POSCO submitted timely written allegations 
that the Department made a ministerial error which resulted in a change 
of at least 5 absolute percentage points in, but not less than 25 
percent of, the weighted-average margin calculated in the preliminary 
determination. POSCO alleged that the Department erred by (1) failing 
to apply a weighted-average exchange rate in calculating normal value; 
(2) inadvertently excluding all of POSCO's sales to customers that had 
been affiliated only during a portion of the POI; and (3) failing to 
include deductions for inland freight transplant to warehouse and the 
warehousing expenses in calculating normal value.
    The Department preliminarily determined that the decline in the won 
at the end of 1997 was so precipitous and large that the dollar-won 
exchange rate cannot reasonably be viewed as having simply fluctuated 
during this time, i.e., as having experienced only a momentary drop in 
value. Therefore, in making this preliminary determination, the 
Department stated that it would use daily rates exclusively for 
currency conversion purposes for home market sales matched to U.S. 
sales occurring between November 1, 1997 and December 31, 1997, while 
applying a standard exchange rate model with a modified benchmark for 
January to February, 1998. However, in the final stages of the margin 
calculation program, the Department inadvertently used these 
``modified'' daily rates instead of a weighted-average exchange rate. 
For a further discussion of this

[[Page 3930]]

issue, see Analysis of Alleged Ministerial Errors--Preliminary 
Determination of Sales at Less Than Fair Value: Stainless Steel Sheet 
and Strip in Coils from Korea (``Analysis Memo''), dated January 19, 
1999.
    With respect to sales made to unaffiliated parties during the POI, 
POSCO had made sales to unaffiliated parties that had previously been 
affiliated. In identifying and excluding sales to affiliated parties 
that had failed the ``arm's length test,'' the margin calculation 
program did not differentiate between sales made before and after the 
companies were unaffiliated, and therefore, all sales to these 
companies were inadvertently excluded in the margin calculation 
program. See Analysis Memo. In addition, inland freight from plant to 
warehouse and warehousing expenses were also inadvertently excluded 
from the calculation of movement expense used to determine normal 
value. As both of these expenses are standard deductions to normal 
value, their exclusion was a clerical error on the part of the 
Department. For a further discussion of this issue, see Analysis Memo.
    In conclusion, we agree with POSCO that we inadvertently used daily 
rates instead of a weighted-average exchange rate, that sales made to 
unaffiliated companies were erroneously excluded from the calculation 
of normal value, and that deductions for inland freight from plant to 
warehouse and warehousing expenses were inadvertently excluded from the 
calculation of normal value. Because these errors taken together 
constitute a significant ministerial error, as defined in 19 CFR 
351.224(g), we are amending our preliminary determination. In 
accordance with this amendment, we will amend POSCO's cash deposit rate 
from 12.59 to 3.92 percent, and the All Other's rate from 12.59 to 3.92 
percent. See ``Suspension of Liquidation'' section, below.

Amended Preliminary Determination

    As a result of our correction of these ministerial errors, we have 
determined the following amended weighted-average dumping margins 
apply:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      percentage
------------------------------------------------------------------------
Inchon.....................................................         0.00
  POSCO....................................................         3.92
  Taihan Electric Wire.....................................        58.79
  All Others...............................................         3.92
------------------------------------------------------------------------

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
Customs Service to suspend liquidation of all imports of subject 
merchandise that are entered, or withdrawn from warehouse, for 
consumption on or after the date of publication of this notice in the 
Federal Register. We will instruct the Customs Service to require a 
cash deposit or the posting of a bond equal to the weighted-average 
amount by which the normal value exceeds the U.S. price, as indicated 
in the chart above. We will also instruct the Customs Service not to 
require cash deposits for manufacutrers/exporters with de minimis or 
zero margins. These suspension-of-liquidation instructions will remain 
in effect until further notice.

ITC Notification

    In accordance with section 733(f) of the Act, we are notifying the 
U.S. International Trade Commission (``ITC'') of our amended 
determination. If our final determination is affirmative, the ITC will 
determine before July 6, 1999, whether these imports are materially 
injuring, or threaten material injury to, the U.S. industry.

Public Comment

    Case briefs or other written comments in at least ten copies must 
be submitted to the Assistant Secretary for Import Administration no 
later than February 23, 1999, and rebuttal briefs, limited to issues 
raised in case briefs, no later than March 1, 1999. A list of 
authorities used and an executive summary of issues should accompany 
any briefs submitted to the Department. Such summary should be limited 
to five pages total, including footnotes. In accordance with section 
774 of the Act, we will hold a public hearing, if requested, to afford 
interested parties an opportunity to comment on arguments raised in 
case or rebuttal briefs. Tentatively, the hearing will be held no later 
than March 3, 1999, time and room to be determined, at the U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230. Parties should confirm by telephone the time, 
date, and place of the hearing 48 hours before the scheduled time.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, no later than February 3, 1999. Requests should contain: (1) the 
party's name, address, and telephone number; (2) the number of 
participants; and (3) a list of the issues to be discussed. Oral 
presentations will be limited to issues raised in the briefs. We will 
make our final determination no later than May 19, 1999.
    This amended preliminary determination and notice are in accordance 
with section 733(d)(2) of the Act and 19 CFR 351.224 of the 
Department's regulations.

    Dated: January 14, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-1777 Filed 1-25-99; 8:45 am]
BILLING CODE 3510-DS-P